Contract Pilot checklist:
- Decide to go freelance...............................Confirmed
Independence is in our DNA....heck, it's in America's founding documents. For many professional pilots, the ideal life would be to have total control over when to work, where to work, and for whom to work. For an entrepreneurial few, this may lead to a career as a Contract Pilot. But just because it may be an option, it still may not be appropriate. As a parallel, home ownership is touted as an "American dream", but many times it turns into a real nightmare (in case you missed it, there was a financial meltdown, the introduction of mass short-sales and recession circa 2008 because people were sold a dream without a grounding in reality). There's nothing wrong with renting (a job, or a house). Here are some things to consider:
Is there a market for you as a freelance pilot?
Some say that the current state of affairs in the aviation industry is disastrous for the economy and for pilots. I say, non-sense.
Without discounting or minimizing the unfortunate effects the pandemic has caused, as terrible as they are, there is great opportunity in the field of aviation right now. As the airlines seek federal assistance, the unions negotiate against reduction in crew-member pay and benefits, and inevitable furloughs are seen on the horizon, people still need to fly.
The industry is evolving, and for the better. It will look drastically different a year from now. Fear will subside. Processes and procedures will be implemented to keep people safe, and the business model for air travel will have morphed into a more efficient and sustainable network of business class airplanes (and crews), providing point-to-point service without the hassle of long lines, flow control delays, or missed connection. (See "Automatic Dependent Surveillance" article here)1. Necessity breeds innovation and the "New Normal" will offer opportunities that we as an industry will recognize as a result of the crisis.
What's in it for me?
Independence. High pay potential. A total, absolute responsibility for your own future!
Clint White 2 wrote an excellent piece a little while back that addresses many of the items pertinent to this line of work. And he rightly points out that: "In this new age of working, the phrase “gig economy” is used quite a bit. Like UBER or LYFT or a number of other freelance services, the idea of an “on demand” work schedule is supposed to be the new and hot “thing”. However, a small, but growing group of pilots have long been engaged in “on demand” flying for many years. " It's not the world's oldest profession, but the idea has been around for a while. Another noted author, Ron Rapp, also wrote about some of the aspects of the contract pilot world in his article: "Contracting: A Great Career Option for the Professional Pilot" 3 and does a fantastic job outlining the Pros and Cons pertaining to this line of work.
So the money.....what about the MONEY?!?!?! As stated above, there is great earning potential in the world of freelance piloting. The amount is a function of aircraft type, demand based on urgency/scarcity, and negotiation. Two sources give us an idea of the range (from 2019 data, as a datum to which it is assumed the steady state will return). The first is the 2019 US Salary Summary,4 which list Low, High, and Average salaries in Corporate, Charter, and EMS annual salaries for jets, turboprops, and helicopters. The second 5 lists different contract rates based on the type of aircraft. It might be useful to do an apples to oranges comparison, as such:
So purely on monetary compensation, the Contract Pilot would work merely 62.4 days a year for equivalency, though I'm not sure who would pay someone to work a fifth of a day. Pretty sweet, right?
Here's the catch...they can be two totally different animals when it comes to business, life and financial planning. Variables include:
- The corporate pilot is typically an employee of the company, receiving benefits (health insurance, 401(k), etc.) which may be provided or subsidized by the firm.
- The corporate pilot may be "tied to a pager" (for the younger folks, that's the precursor to cell phones) and totally at the scheduling mercy of the employer.
- As a an independent agent, the contract pilot is solely responsible for 1) finding work, 2) negotiating with clients on compensation and expectations, 3) managing personal financial obligations such as paying taxes (federal and state), insurance (liability, life, disability), cash flow and expense management, and retirement, and 4) work-life balance
What to expect in the series:
- HAVE A PLAN
- BUSINESS FORMATION: WHAT TYPE OF ENTITY IS APPROPRIATE?
- RISK MANAGEMENT
- OPERATING AS A CONTRACTOR
Hopefully this has piqued your interest in the world of contract aviation. Our firm is positioned to assist in many aspects of your independent journey into the blue skies of working for yourself, but not by yourself.
Featured Image https://www.gulfstream.com/en/aircraft/gulfstream-g650er/